Foxconn, Apple’s main supplier, plans major expansion in India

Foxconn also plans to build a new production plant in the southern state of Karnataka, where it would make products including iPhones, people familiar with the matter said.

In addition, Foxconn plans to build a new production site in the southern city of Hyderabad as well as a silicon carbide manufacturing plant and packaging facility in India for its semiconductor business, some people said.

Foxconn’s expansion plans are under review and could change.

Foxconn Chairman Young Liu traveled to Bengaluru, Karnataka state, and Hyderabad during a visit to India this week, while meeting Prime Minister Narendra Modi in New Delhi. The Modi government has introduced billions of dollars in incentives in recent years to attract global manufacturers to India, part of a major effort to boost advanced manufacturing jobs and reduce dependence on imported materials. electronic products.

Apple has pushed suppliers to diversify beyond China after many repeatedly faced production disruptions in China during Covid-19 shutdowns. Meanwhile, geopolitical tensions have risen between the United States and China, as well as between Beijing and Taiwan, where Foxconn is based. Beijing considers Taiwan, a democratically governed island near mainland China, to be part of its territory.

China has been the biggest electronics supply chain manufacturing hub for years, with Apple a major driver having built much of its supply chain and assembly in the country over the past two decades. .

Concerns over the addiction intensified after protests erupted at the world’s largest iPhone production site in Zhengzhou, central China, late last year amid growing frustration among workers in the face of strict pandemic control policies and wages.

Still, expanding into India won’t mean companies like Apple and Foxconn will leave China, supply chain officials say. The supply chain infrastructure these companies have built over decades cannot easily be replaced by other countries, they say. China also has a large workforce and experience in manufacturing.

Despite advances in local production of automobiles and smartphones in recent years, India has long lagged its regional rivals in advanced manufacturing due to concerns about the country’s difficult bureaucracy, protectionist rules and underdeveloped infrastructure.

A spokesperson for Foxconn, officially known as Hon Hai Precision Industry Co., declined to comment on the plan and said the company was not commenting on specific customers or products. Apple did not immediately respond to a request for comment.

Bloomberg previously reported on Foxconn’s plan to expand into Karnataka.

Mr. Liu’s visit to India came just days after he traveled to Zhengzhou to visit Foxconn’s iPhone production campus and meet with workers there, as well as senior local officials.

India, alongside Vietnam, has already been identified by Apple as a top destination, with the Cupertino-based company seeking to diversify the sites where its products are assembled. Apple has asked its suppliers to more actively plan assembly of its products beyond China and elsewhere in Asia, particularly India and Vietnam, The Wall Street Journal reported.

Taiwan-based contract manufacturers including Foxconn and Wistron Corp.

have set up factories in India in recent years to produce iPhones primarily for the country’s domestic market.

Apple also worked with contract manufacturers in India to speed up the production process to shorten the typical time between when devices are made in China and when they are produced in India, the Journal reported.

—Selina Cheng contributed to this article.

Write to Rajesh Roy at rajesh.roy@wsj.com, Yoko Kubota at yoko.kubota@wsj.com and Philip Wen at philip.wen@wsj.com